Employer of Record in Andorra

An Employer of Record, or EOR, helps you hire employees in other countries. If you want to hire someone in Andorra but do not have a legal entity there, an EOR is your solution. It handles all the local HR tasks like payroll, taxes, benefits, and compliance with Andorran labor laws. This lets you focus on managing your employee's day to day work, while the EOR takes care of the legal and administrative responsibilities of employment. For a simple way to hire in Andorra and other countries, you can work with an EOR provider like Rivermate.

How an Employer of Record (EOR) Works in Andorra

Using an EOR in Andorra simplifies hiring. The process is straightforward.

1. You find your candidate. You recruit and select the person you want to hire in Andorra.
2. The EOR hires the employee. The EOR uses its local Andorran entity to legally hire your chosen candidate.
3. A compliant contract is created. The EOR drafts an employment contract that follows all Andorran labor laws.
4. Onboarding is handled. The EOR manages all the necessary paperwork to officially bring your new team member on board.
5. Payroll and benefits are managed. The EOR handles salary payments, taxes, social security contributions, and benefits administration.
6. You manage your employee. You manage your employee’s daily tasks and responsibilities while the EOR handles the HR and legal aspects of their employment.

Why use an Employer of Record in Andorra

Using an EOR in Andorra allows you to build a team there without setting up a local legal entity. This saves you time and money. An EOR handles the complexities of local labor laws, which reduces your risk and administrative burden.

Here are some key benefits:

• Enter the market quickly. You can hire employees and start operations in Andorra much faster than if you had to establish your own company.
• Ensure compliance. EORs are experts in Andorran labor law. They make sure your employment contracts, payroll, and benefits are fully compliant.
• Simplify HR and payroll. The EOR manages all payroll, tax withholdings, and social security contributions.
• Offer competitive benefits. An EOR can provide your employees with compliant and attractive benefits packages from day one.
• Reduce risk. Misclassifying an employee as a contractor can lead to significant penalties. An EOR eliminates this risk by acting as the legal employer.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Andorra includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in Andorra.

Hiring in Andorra is a unique process. This small country, nestled between France and Spain, has a dynamic economy driven by tourism and retail. This means there's a consistent demand for seasonal workers, especially during the winter. However, Andorra's small population presents a challenge when you're looking for specialized talent. To hire foreign nationals, you'll need to navigate the work permit system and prove the position can't be filled by a local.

Employment contracts & must-have clauses

While oral agreements are theoretically possible, you should always use a written employment contract in Andorra. All contracts must be in Catalan, the official language.

Here are the essential clauses to include:

• Identification: Full details of both the employer and employee.
• Job Details: A clear description of the role and responsibilities.
• Compensation: The salary and any additional benefits, stated in Euros.
• Working Hours: A breakdown of the work schedule.
• Contract Duration: Specify if the contract is for a fixed term or is indefinite.
• Probation Period: The length and terms of the probationary period.
• Paid Leave: Details on the annual leave entitlement.
• Social Security: Information on social security (CASS) and insurance.

There are two main types of employment contracts in Andorra:

Probation periods

You can include a probationary period in an employment contract to see if a new hire is a good fit. During this time, either you or the employee can end the contract without notice. The length of the probation period can vary, but it typically ranges from three to six months.

Working hours & overtime

The standard workweek in Andorra is 40 hours, usually spread over five days. Employees are entitled to a 30-minute break after six consecutive hours of work.

Overtime is permitted but has its limits. Here's a quick look at the rules:

• Weekly Limit: Up to 12 hours of overtime per week.
• Monthly Limit: Up to 48 hours of overtime per month.
• Annual Limit: Up to 426 hours of overtime per year.

Overtime pay is calculated at a higher rate than the standard salary. If there's no specific company agreement, the minimum overtime pay is 125% of the regular rate.

Public & regional holidays

Employees in Andorra are entitled to paid time off for public holidays. There are four national holidays that are always observed:

• January 1 (New Year's Day)
• March 14 (Constitution Day)
• September 8 (Our Lady of Meritxell Day)
• December 25 (Christmas Day)

If an employee has to work on one of these days, they must be given two days off in compensation. In addition to these, there are other public holidays that may be moved by agreement, especially in the tourism sector. Each parish also has its own local holidays.

Hiring contractors in Andorra

You can hire independent contractors in Andorra for specialized skills or project-based work. This offers flexibility and can reduce costs since you don't have to pay for employee benefits, payroll taxes, or office space. Contractors are responsible for their own taxes and social security contributions.

However, it's crucial to correctly classify workers. Misclassifying an employee as a contractor can lead to serious penalties, including back payments for social security and tax liabilities. An Employer of Record (EOR) can help you mitigate this risk. An EOR acts as the legal employer, ensuring that your hiring practices are fully compliant with Andorran labor laws. This allows you to work with talent in Andorra without the legal and administrative burdens of hiring employees directly.

Navigating compensation and payroll in Andorra is straightforward. The country uses the Euro, and employment contracts should be in Catalan, detailing remuneration in Euros. As an employer, you are responsible for deducting social security contributions and any applicable income tax from your employees' salaries.

Payroll cycles & wage structure

The standard payroll cycle in Andorra is monthly. You typically pay employees their net salary once a month, often near the end of the month. Payments are almost always made by bank transfer. While not required, some companies offer performance bonuses or a Christmas bonus.

Overtime & minimums

The standard work week is 40 hours. For any hours worked beyond this, you must pay overtime.

• First 4 hours of overtime: 125% of the regular hourly rate.
• Hours 5 through 8 of overtime: 150% of the regular hourly rate.
• 9+ hours of overtime: 175% of the regular hourly rate.

As of 2025, the national minimum wage is €1,377.58 per month. If your employees work a night shift, between 10 p.m. and 6 a.m., you must pay them at least 20% above their regular wage.

Employer taxes and contributions

You are responsible for contributing to Andorra's social security system, known as CASS (Caixa Andorrana de Seguretat Social). This covers benefits like healthcare, maternity leave, and pensions. Your total contribution is 15.5% of the employee's gross salary.

Employee taxes and deductions

Employees also contribute to the social security system. You will withhold their contribution from their monthly salary. Additionally, you are responsible for withholding personal income tax based on their earnings.

In Andorra, you'll find that employee benefits and leave are straightforward and centered around ensuring a good work life balance. The system is a mix of government mandated requirements and extra perks that companies offer to attract the best talent. Think of it as a solid foundation of essential benefits with the flexibility to add more on top.

Statutory leave

Andorran law makes sure you get the time you need away from work.

• Annual Leave After one year with a company, you get a minimum of 30 calendar days of paid leave. If you have been with the company for less than a year, you build up 2.5 days of leave for each month you work.
• Sick Leave If you are sick or have an accident, your employment contract is suspended. You will need to provide a medical certificate within 48 hours. The social security system, known as CASS (Caixa Andorrana de Seguretat Social), manages sick leave payments.
• Maternity Leave New mothers receive 16 weeks of fully paid leave. This can be extended to 18 weeks for multiple births or complications.
• Paternity Leave Fathers are entitled to paternity leave when a child is born or adopted.
• Other Leave You may also be able to take paid time off for events like a death in the family or your own marriage.

Public holidays & regional holidays

Andorra has 14 national public holidays. In addition to these, each of the seven parishes has its own local holidays.

Typical supplemental benefits

To stay competitive, many companies in Andorra offer more than just the legally required benefits.

How an EOR can help with setting up benefits

Setting up employee benefits in a new country can be complex. An Employer of Record (EOR) simplifies this process for you.

An EOR already has a legal entity in Andorra, so you don't need to set one up. They handle all the administrative tasks, from enrolling employees in the social security system to managing payroll and ensuring you comply with all local labor laws. This means you can offer competitive benefits packages without getting lost in the details of Andorran regulations. An EOR helps you attract and retain talent by offering compliant and attractive benefits from day one.

When an employment relationship in Andorra ends, there is a formal process to follow. This process, known as termination and offboarding, is guided by Andorran labor law to ensure fairness for both the employee and the employer. It involves specific rules about giving notice and making final payments. The goal is to make the employee's exit smooth and compliant with all legal requirements.

Notice periods

When you decide to terminate an employee in Andorra, you must provide them with a notice period. The length of this period depends on how long the employee has worked for your company. A typical notice period is one day for each month of service, with a maximum of 90 days. For employees with less than one year of service, the notice period is generally 15 days. If an employee has been with the company for one to five years, the notice period is 30 days. For those employed for more than five years, it's 60 days. It is important to follow these legal requirements to avoid potential disputes.

Severance pay

In Andorra, employees who have worked for at least six months are usually entitled to severance pay. The amount is typically calculated as 15 days' salary for each year of service. This calculation is based on the employee's average salary over the last 12 months. There is often a cap on the total severance pay, which is equivalent to 12 years of service. The specific details of severance payments should be outlined in the employment contract.

How Rivermate handles compliant exits

Navigating employee exits in a different country can be complex. At Rivermate, we manage the entire offboarding process for you. We ensure that every step complies with Andorran labor law.

Here’s how we help:

• Legal Compliance: We handle all termination procedures according to the law, making sure there are valid grounds for dismissal and all contract terms are met.
• Notice Periods: We manage the required notice periods based on the employee's length of service and prepare all necessary documents.
• Severance Pay: We accurately calculate and process all severance payments owed to the employee.
• Final Settlement: We take care of the final payment, which includes any unpaid salary, accrued vacation time, and other benefits.

By handling these details, we make the process straightforward and compliant, allowing you to focus on your business.

Getting a visa to work in Andorra involves a few key steps. For short stays of up to 90 days, you can enter as a tourist. If you plan to work and live in the country for longer, you need the correct permit. The government manages immigration through a quota system, which means it limits the number of foreign workers allowed each year based on the country's needs. Officials prioritize local citizens and those from Spain, France, and Portugal for jobs. The main permit for foreign employees is the active residency permit, which allows you to both live and work in Andorra.

Employment visas & sponsorship realities

To work in Andorra, you need an active residency permit, and you must have a job offer before you can apply. Your employer must sponsor your application. The company has to show that it could not find a suitable candidate locally to fill the position. An Employer of Record (EOR) can act as your legal employer in Andorra and handle the sponsorship process for you.

The application process requires several documents. Your employer submits the request to the Andorran authorities. You will need to provide:

• A valid passport
• A formal employment contract
• Your resume and proof of qualifications
• A police background check from your home country
• Proof of a place to live in Andorra
• A birth certificate

After your employer starts the process, you must also register with Andorra's social security system, known as CASS. You typically wait in your home country for the permit to be approved.

Business travel compliance (short-term visits)

You can visit Andorra for up to 90 days as a tourist without a visa. This is usually enough for activities like attending business meetings or conferences. However, if you plan to do any hands-on work, even for a short period, you need authorization.

For temporary jobs, especially in seasonal industries like tourism, a seasonal work permit is available. This permit allows you to work for a limited time, and you must leave the country when your contract ends. Always make sure you have the right authorization before performing any work to stay compliant with local laws.